Crude oil prices continued their downward spiral Monday as oil producers braced for a jump in oil exports from Iran, amid the lifting of Western sanctions against the country over the weekend. With the oil markets already grappling with overcapacity, Monday’s slide in prices sent shudders through the Asian markets, sending the Japanese stock market briefly into bear territory, according to reports.

Brent Crude, the international benchmark for oil prices fell as much as 4.3 percent in Asian trading to $27.7 a barrel, the lowest since November 2003, before recovering to $28.58 by 12:41 a.m. EST. The decline followed a 6.7 percent slump in prices Friday.

West Texas Intermediate, the US benchmark, was down 1.5 per cent in Asia at $28.99.

With Iran — which owns 10 percent of the world's proven oil reserves — free to export oil again, prices are expected to fall further in the near term, CNBC reported, citing commodities analyst ANZ. With sentiment ruling fundamentals in the current market, "anything is possible" when it comes to prices, Daniel Hynes, an analyst at ANZ, said.

While the supply surplus is reducing, with re-balancing expected in the next 12 months, overall supply-demand fundamentals were still weak so the market was putting downward pressure on prices to spur a readjustment, he added.

While industry watchers expect it will take some time for Iran to completely revive its oil producing infrastructure, markets started reacting to Iran’s news on Sunday when shares in Saudi Arabia fell more than 6 percent after Iran’s deputy oil minister said that the country expects to increase its crude exports by 500,000 barrels per day.

The country currently has least a dozen Very Large Crude Carrier super-tankers filled with crude oil ready to ship to India, according to reports.